Transcripts For CNBC Closing Bell 20130802 : vimarsana.com

Hes been too optimistic. Hes calling for a longer time frame. I like that story. Were now less than two hours away from time warner customers losing cbs and showtime. Its a big deal. Today is the deadline. Well have updates on any developments or if either side speaks out. Weve got many cities watching that one carefully. Also keeping a close eye on two potentially dangerous situations in the middle east. More protests in egypt today, this one in support of ousted president morsi and we also have an update on the Terror Threat that has prompted the u. S. To shut down embassies this weekend. Yeah. That is a story thats still developing. It hasnt affected the markets. No, not anyway yet. Weve been all over the map. Take a look at this chart. We had losses at the beginning of the day that we did, in fact, see that bigger than expected jobs numbers but were down about seven points as we approach the final stretch for the week. 15,620. Were down from yesterday. Up 6. 75 on the nasdaq and the Standard Poor index, having risen, but still in negative territory, bill. So a disappointing jobs report, but was it disappointing for investors . Bob miss. Traders have had various comments, are the feds going to be around longer. We all know that. And were still seeing selloffs met with a bythedip mentality overall. Those are the three issued. Take a look what were doing with the dow industrials. Were just about to go positive here, and ill tell you if it wasnt for the crummy earnings, e e exxon, im talking with you. The refiners are to the downside. The bottom line here is traders are not looking for perfection in any way. The vix is sitting at a six or sevenyear low. That was the lowest since march. Look, the bottom line is what happened to the second half turnaround . Were supposed to get better numbers. Thing, guys, most of the people i talked with are going to need a lot more negative data points before anybody gives up the idea that the second half is not going to be a modestly better half than the first half was. Its still alive, that idea, and think thats one of the reasons the markets holding up so well. Thanks, bob. Yep. It will be record heise today. So were just off yesterdays records with this sub par jobs reports. This morning lets talk about it. Yeah. Joining us to break it all down is dave. John manly from wells fargo funds management, Anthony Valero and anthony chan. Let me kick it off with you. Your characterization of the jobs report today, what does it tell us about the economy and about tapering . A couple of things. Its weaker, but by no stretch of the management is it a different number. I remember doiuring the financi crisis, we had declines. This is not a bad number. Weve got about 175,000 on an average. People are going to complain about parttime workers but by and large, the economy is decelerating. Were impatient to expect higher numbers right now. I think we are ball the real gdp numbers have slowed down and you should see a little bit of a slowdown, but these numbers are still suggesting we have positive growth. John manly, does this change your view of the stock market here . No. Think this is a number no ones going to talk about. There was no c change here. Its still going to be slow because of the way ceos run their money. That gives you the boy ansi were seeing today. All of that is fair and well, but what does this mean for investing, right . What do you do in an economy thats slow to create jobs and is sort of bouncing along the bottom . You buy. I think you buy stocks. What happens in the next year, year and a half, youre not going to see the thing fall apart. Meanwhile the feds going to push money. Earnings are still rising. Its still a great product. Dave fleischer, what do you think . Here were sitting at alltime highs and were sitting at job growth. Thats right. Weve been positioning our folks for increased volatility which we do expect for the second half of the year. We have a political risk. The market seems to be hypersensitive and we have the pending appointment of a new chair. What we havent talked about is Interest Rates and what this means for investors. Theres a whole bunch of them who wont know what happened to them as rates do begin to come up in a much more deliberate pace. We view what occurred in the late spring, early summer with the jump in the summer a nice warping shot for bond and specifically Bond Fund Investors to make sure theyre short and prepared for the Interest Rates as well. Anthony va valeri, what about you . I think is is a softer report, but not terrible overall and still indicative of it. Yeah, you do have to look optimistically on stocks. With regards to bonds, i think this further enhances the ran rangebound yeel. I think Bond Investors have already got kind of a shock, so this has been a severe selloff. Its a low return environment going forward. Anthony chan . Any more . Were getting used to this. We had another one today. I think we were going to continue to see those kinds of days because remember the Federal Reserve is suppressing longterm Interest Rates and to the extent that they stop pressing them as much, youre going see that. Is that confusion on the part of the bond market . Is it a misperception of fed intentions . Why the tremendous i think its going because every single day aerchld time we get new information that the Federal Reserve can react quicker or slower, youre going to see those kinds of movements because theres a huge disparity between where Interest Rates are today and where they should be. Whos jumping in . Id argue that were seeing roughly fair value on bonds here. The problem is its really a liquid market and price rings get what value are you talking about, anthony . 275 or 260 . Theres a big difference. When they say it should be equal to the inflation rate plus the growth to the economy . The economys running at 2 . That means the fair value given the fundamentals today is over 3. 5 . Nominal gdp is running 2 president 9 . Theres a close correlation as well. Theres a lot of metrics you can measure by. Bonds should remain a little expensive. You know, i think ten basis points, 20 basis points here or there does not is not that big a deal, but, again, looking people are going to stay on the sidelines. It is a tough environmental for bonds but we need more robust data. Bottom line, does anybody on the panel think that the fed begins tapering this september given what we saw today . I dont they wont do it if they think theres going to be an impact on the economy. Anthony chan . I think what theyll do is make that. What theyll do is alter the amount. So, yes, september. Yes, september. Anthony valeri, september or no . Yeah. I say 70 chance february begins to taper in september. Dave, youre up. Dave fleischer yep. If theres any indication that theres going to be debtment to the economy the fed has demonstrate theydll be more cautious than not. So no. Thank you, guys. I dont think so until Larry Summers takes over. Weve got 15 minutes left in the trading session here. We could go positive. We could. The s p wants to go down. The dow is down five points after having been down. Linkedn stock. Well tell you. You cannot afford to miss this coming up. That and a lot more coming up on closing bell. Back in a moment. Clients are always learning more to make their money do more. ann to help me plan my next move, i take scottrades free, inbranch seminars. Plus, their live webinars. I use daily market commentary to improve my strategy. And my local scottrade Office Guides my learning every step of the way. Because they know i dont trade like everybody. I trade like me. Im with scottrade. announcer scottrade. Ranked highest in Customer Loyalty for brokerage and investment companies. Well, the whispers were for more jobs to be created. May and june were combined lower for a combined 26,000 job and that sent the stock market lower. The dow has come back and the s p has just touchdown popular. Even though the Unemployment Rate came down. What does this say about the economy . Joining us to talk about it is Steve Liesman and rick santelli. Whats of youyour assessment . Its not gone down easily. We have been talking about this all day. Its right in the middle. I was hoping to go hope. Its 160 with a 74 and its a complicated number. I think what you heard is instructed. He said the fed needs more data. Rick, the bond market seems to suggest that theyre not going to accept it any time soon, dont you think . Im reading the bond market totally different. Lets go to the wayback machine. Last number was better than expected with positive provisions. Today were seeing the opposite. I have a sense that the bond market may be subcy dids and it may not be at its true value. I think its behaving in a logical action. Bad news brings rates down, good news brings rates up. The only difference is when they get done with these programs, i have a feeling youre going to keep behaving that way but youre going to scale up 40 basis points higher in the range. Let me ask you guys can we realistically expect to begin tapering next month . A lot of people think tapering begins in september. I say no way. Can it really start in september after these numbers . Its next month. Theres a lot of ways they can do it. For example, a sense that they bring it down by 20 billion, but thats where they would stay for a while. The feds view on this is that the individual months reduction does not matter. What matters is the amount of projection. Thats the stock and flow thing. Some say the fed has this wrong which i have some sympathy for that argument. But right now the way the fed views the world is the amount of bonds it takes off the world and thats what the market prices in. The question is the multiple the market puts on that reduction. Steve, let me ask you a question. Listen. Heres the way i look at it. Forget the taper talk for a minute. In the end lets assume that this is the speed of jobs and this is the speed of the economy, okay . And barring that the economy gets its act together and does things that will create jobs in the private sector, does the fed think they can do this . What if this is the new normal . No. Thats an important point. What i can tell you is bernanke disagrees with you. I know that. I dont think he would disagree with you forever. What does Larry Summers think . I think he would agree on that. The fed believes that its policies can affect the economy, can affect the level of unemployment, affect the amount of job growth thats out there. If it got to a point where it thought that rick is right, my level of unemployment is higher, that it aint coming back higher than that, then youds up on it. Youd have no inflation risk. Steve, did you ever did you ever watch old westerns when you were a kid . Oh, yeah. Listen. They didnt have doctors in Emergency Rooms and balances. They put a ball in the gun, they shot the other guy. Hes wounded. Now, he didnt get good surgery and medicine but over a couple of years hes back in the saddle. Do they have a function in their m. I. T. Models where its been five years and the year after they start. How do we know there was any correlation to the fact that i have a Balance Sheet . They do. The m. I. T. Textbook says dont run the economy like a spaghetti western. Believe me. That sauce wouldnt turn out any less tasty. Go ahead. Make our day there, steve. Thats good. Theres an important point here. Bernanke and others are sort of running a dock tan saying if they can help, they should help and thats part of what theyve been mandated to do by their legislators and lawyers. Thats why i totally agree. We need to vote people in to take one of those pillars and drag it down. Im all for it. Rick, you bring up a good point. We have been so conditioned so solving a big major problem within an hour or by the third reel of a Motion Picture that we expect this to have solved the problem in about five years and it just is not the case. Exactly. Were still deleveraging and the economy is still muddling around here. Yep, yep, particularly with europe in the mud. Theres an attitude that recessions are good for economies, they wring out ek sayses. But theres a part that says you dont have to do that. Thats the doctrine ive heard guys like stan, an m. I. T. Guy says, you know what . I cannot stand by when i have a tool and know how to use it. Recessions an m. I. T. Study, recessions are kind of like economic enemas. Oh, boy. Can we go back to the western metaphor . Have a good weekend, guys. Thank you. Well see you a little bit. Weve got a market thats flat. Industrial is down 2 points. Look at this chart im told. Its coming. Linkedinsharelinked linkedin speaking of big designs, war Rhett Buffett they say, im on my way of becoming the richest person in the world. Its just a matter of time i dont know if ill pass him on the right side or left side, its going to happen. So much for the prediction. Hes lost 33 billion in less than a year and a half. How does that happen . Coming up, well take a look at whether a comeback could possibly be in the cards. How he lost his money and then some. Breathtaking. Coming up on closing bell. Stocks kind of hovering. Josh, break down the stocks for us. Lets recap some of the big movers in todays trade. First up, vie a kilometacom jus the bottom line. Also in the green today, mylan. Cowan races this to perform. Remember the intraday low was 17. 55. Now charge back to that offering price of 38 bucks. And well end up on linkedin. Our own Julia Boorstin she talked to the ceo of linkedin today. Take a listen. Were going to focus on longterm Value Creation and along those lines its about executing the plan and we were pleased with our quarter. Investments pleased as well. Up some 100 so far this year. Maria, back to you. Thank you so much. We Start Talking numbers on the stock. Good to see you both. Yusuf, youre up. You upgraded linkedin. You took your price target from 170 to 250. Whats the biggest driver for this stock . Really, the biggest driver is the numbers they put out yesterday and looking out for them the next five to ten years. This is a business thats just really getting started. We think longterm growth is not 15 or 20 . When you put that in the chart its better numbers. What does that tell you, abigail . It suggests theres a weak link that tells you its time to sell. Its moving in the right direction. Up. However, less pleasing to the eye is the piercing channel to the upside. More likely what happens more wauchb this kind of manic trading is a complete reversal. Probably back down to a nearterm floor of support around 160. This chart says to me get out above 200 while you begin. Any thoughts on that yousef . Right. Ill leave that to abigail. What i can tell you is the numbers are improving and frankly if it were to pull back, wed be buying a lot. This is a story that should be playing in the next three to five years. That said, q4 historically is seasonably strong for them and they have a number of products particularly on the advertising side theyre going to be launching between now and year end. So we think the momentum is going to continue. It will be interesting to see. Does valuation become an issue at any point . To me it does. It absolutely does. Go ahead abigail. No. Y yousef, im asking you about valuation. Its one of the most expensive names in our space, yep is the only other name. We feel theres been a rotation into stocks with relative scarcity. In other words, if youre a large cap tech investor, one in exposure to the internet, there really arent that Many Companies growing at 50 , 60 , 70 , and doubling their margins over the next few years so i think thats important to consider. Abigail, final word here. Yeah, maria. Valuation does concern me. The price in 1999, ridiculousness. I think thats what its suggesting. When cooler heads prevail, youre going to see that pull back. All right. Well leave it there. Thanks very much to you both. Well keep watching. 30 minutes left. The dow and s p have just turned positive. Any positive close is a new alltime high and were work on our sixth consecutive uptick. Meanwhile u. S. Job growth remains pretty slow despite the Unemployment Rate falling to the lowest level in four years. Thats next. Also, how will the jobs number affect the feds decision to ease up on the stimulus . Coming up, ill ask somebody who used to be in those summit meetings. Check out the Online Edition of talking numbers at cnbc talking numbers. Learn how you can earn up to 300 commissionfree online trades tdd 18003452550 for six months with qualifying net deposits. Tdd 18003452550 see how easy and intuitive it is to use tdd 18003452550 our most powerful platform, streetsmart edge. Tdd 18003452550 we put it in the cloud so you can use it on the web. Tdd 18003452550 and trade with our most advanced tools tdd 18003452550 on whatever computer youre on. Tdd 18003452550 also, get a dedicated team of schwab trading specialists tdd 18003452550 who will help you customize your platform tdd 18003452550 even from the comfort of your home. 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Theyre joined by laura. Talk about the state of the job market. Laura, let me kick this up with you. Thanks so much for your time. You saw one disturbing factor. Explain . I think the one disturbing factor is the Terror Threat<\/a> that has prompted the u. S. To shut down embassies this weekend. Yeah. That is a story thats still developing. It hasnt affected the markets. No, not anyway yet. Weve been all over the map. Take a look at this chart. We had losses at the beginning of the day that we did, in fact, see that bigger than expected jobs numbers but were down about seven points as we approach the final stretch for the week. 15,620. Were down from yesterday. Up 6. 75 on the nasdaq and the Standard Poor<\/a> index, having risen, but still in negative territory, bill. So a disappointing jobs report, but was it disappointing for investors . Bob miss. Traders have had various comments, are the feds going to be around longer. We all know that. And were still seeing selloffs met with a bythedip mentality overall. Those are the three issued. Take a look what were doing with the dow industrials. Were just about to go positive here, and ill tell you if it wasnt for the crummy earnings, e e exxon, im talking with you. The refiners are to the downside. The bottom line here is traders are not looking for perfection in any way. The vix is sitting at a six or sevenyear low. That was the lowest since march. Look, the bottom line is what happened to the second half turnaround . Were supposed to get better numbers. Thing, guys, most of the people i talked with are going to need a lot more negative data points before anybody gives up the idea that the second half is not going to be a modestly better half than the first half was. Its still alive, that idea, and think thats one of the reasons the markets holding up so well. Thanks, bob. Yep. It will be record heise today. So were just off yesterdays records with this sub par jobs reports. This morning lets talk about it. Yeah. Joining us to break it all down is dave. John manly from wells fargo funds management, Anthony Valero<\/a> and anthony chan. Let me kick it off with you. Your characterization of the jobs report today, what does it tell us about the economy and about tapering . A couple of things. Its weaker, but by no stretch of the management is it a different number. I remember doiuring the financi crisis, we had declines. This is not a bad number. Weve got about 175,000 on an average. People are going to complain about parttime workers but by and large, the economy is decelerating. Were impatient to expect higher numbers right now. I think we are ball the real gdp numbers have slowed down and you should see a little bit of a slowdown, but these numbers are still suggesting we have positive growth. John manly, does this change your view of the stock market here . No. Think this is a number no ones going to talk about. There was no c change here. Its still going to be slow because of the way ceos run their money. That gives you the boy ansi were seeing today. All of that is fair and well, but what does this mean for investing, right . What do you do in an economy thats slow to create jobs and is sort of bouncing along the bottom . You buy. I think you buy stocks. What happens in the next year, year and a half, youre not going to see the thing fall apart. Meanwhile the feds going to push money. Earnings are still rising. Its still a great product. Dave fleischer, what do you think . Here were sitting at alltime highs and were sitting at job growth. Thats right. Weve been positioning our folks for increased volatility which we do expect for the second half of the year. We have a political risk. The market seems to be hypersensitive and we have the pending appointment of a new chair. What we havent talked about is Interest Rates<\/a> and what this means for investors. Theres a whole bunch of them who wont know what happened to them as rates do begin to come up in a much more deliberate pace. We view what occurred in the late spring, early summer with the jump in the summer a nice warping shot for bond and specifically Bond Fund Investors<\/a> to make sure theyre short and prepared for the Interest Rates<\/a> as well. Anthony va valeri, what about you . I think is is a softer report, but not terrible overall and still indicative of it. Yeah, you do have to look optimistically on stocks. With regards to bonds, i think this further enhances the ran rangebound yeel. I think Bond Investors<\/a> have already got kind of a shock, so this has been a severe selloff. Its a low return environment going forward. Anthony chan . Any more . Were getting used to this. We had another one today. I think we were going to continue to see those kinds of days because remember the Federal Reserve<\/a> is suppressing longterm Interest Rates<\/a> and to the extent that they stop pressing them as much, youre going see that. Is that confusion on the part of the bond market . Is it a misperception of fed intentions . Why the tremendous i think its going because every single day aerchld time we get new information that the Federal Reserve<\/a> can react quicker or slower, youre going to see those kinds of movements because theres a huge disparity between where Interest Rates<\/a> are today and where they should be. Whos jumping in . Id argue that were seeing roughly fair value on bonds here. The problem is its really a liquid market and price rings get what value are you talking about, anthony . 275 or 260 . Theres a big difference. When they say it should be equal to the inflation rate plus the growth to the economy . The economys running at 2 . That means the fair value given the fundamentals today is over 3. 5 . Nominal gdp is running 2 president 9 . Theres a close correlation as well. Theres a lot of metrics you can measure by. Bonds should remain a little expensive. You know, i think ten basis points, 20 basis points here or there does not is not that big a deal, but, again, looking people are going to stay on the sidelines. It is a tough environmental for bonds but we need more robust data. Bottom line, does anybody on the panel think that the fed begins tapering this september given what we saw today . I dont they wont do it if they think theres going to be an impact on the economy. Anthony chan . I think what theyll do is make that. What theyll do is alter the amount. So, yes, september. Yes, september. Anthony valeri, september or no . Yeah. I say 70 chance february begins to taper in september. Dave, youre up. Dave fleischer yep. If theres any indication that theres going to be debtment to the economy the fed has demonstrate theydll be more cautious than not. So no. Thank you, guys. I dont think so until Larry Summers<\/a> takes over. Weve got 15 minutes left in the trading session here. We could go positive. We could. The s p wants to go down. The dow is down five points after having been down. Linkedn stock. Well tell you. You cannot afford to miss this coming up. That and a lot more coming up on closing bell. Back in a moment. Clients are always learning more to make their money do more. ann to help me plan my next move, i take scottrades free, inbranch seminars. Plus, their live webinars. I use daily market commentary to improve my strategy. And my local scottrade Office Guides<\/a> my learning every step of the way. Because they know i dont trade like everybody. I trade like me. Im with scottrade. announcer scottrade. Ranked highest in Customer Loyalty<\/a> for brokerage and investment companies. Well, the whispers were for more jobs to be created. May and june were combined lower for a combined 26,000 job and that sent the stock market lower. The dow has come back and the s p has just touchdown popular. Even though the Unemployment Rate<\/a> came down. What does this say about the economy . Joining us to talk about it is Steve Liesman<\/a> and rick santelli. Whats of youyour assessment . Its not gone down easily. We have been talking about this all day. Its right in the middle. I was hoping to go hope. Its 160 with a 74 and its a complicated number. I think what you heard is instructed. He said the fed needs more data. Rick, the bond market seems to suggest that theyre not going to accept it any time soon, dont you think . Im reading the bond market totally different. Lets go to the wayback machine. Last number was better than expected with positive provisions. Today were seeing the opposite. I have a sense that the bond market may be subcy dids and it may not be at its true value. I think its behaving in a logical action. Bad news brings rates down, good news brings rates up. The only difference is when they get done with these programs, i have a feeling youre going to keep behaving that way but youre going to scale up 40 basis points higher in the range. Let me ask you guys can we realistically expect to begin tapering next month . A lot of people think tapering begins in september. I say no way. Can it really start in september after these numbers . Its next month. Theres a lot of ways they can do it. For example, a sense that they bring it down by 20 billion, but thats where they would stay for a while. The feds view on this is that the individual months reduction does not matter. What matters is the amount of projection. Thats the stock and flow thing. Some say the fed has this wrong which i have some sympathy for that argument. But right now the way the fed views the world is the amount of bonds it takes off the world and thats what the market prices in. The question is the multiple the market puts on that reduction. Steve, let me ask you a question. Listen. Heres the way i look at it. Forget the taper talk for a minute. In the end lets assume that this is the speed of jobs and this is the speed of the economy, okay . And barring that the economy gets its act together and does things that will create jobs in the private sector, does the fed think they can do this . What if this is the new normal . No. Thats an important point. What i can tell you is bernanke disagrees with you. I know that. I dont think he would disagree with you forever. What does Larry Summers<\/a> think . I think he would agree on that. The fed believes that its policies can affect the economy, can affect the level of unemployment, affect the amount of job growth thats out there. If it got to a point where it thought that rick is right, my level of unemployment is higher, that it aint coming back higher than that, then youds up on it. Youd have no inflation risk. Steve, did you ever did you ever watch old westerns when you were a kid . Oh, yeah. Listen. They didnt have doctors in Emergency Rooms<\/a> and balances. They put a ball in the gun, they shot the other guy. Hes wounded. Now, he didnt get good surgery and medicine but over a couple of years hes back in the saddle. Do they have a function in their m. I. T. Models where its been five years and the year after they start. How do we know there was any correlation to the fact that i have a Balance Sheet<\/a> . They do. The m. I. T. Textbook says dont run the economy like a spaghetti western. Believe me. That sauce wouldnt turn out any less tasty. Go ahead. Make our day there, steve. Thats good. Theres an important point here. Bernanke and others are sort of running a dock tan saying if they can help, they should help and thats part of what theyve been mandated to do by their legislators and lawyers. Thats why i totally agree. We need to vote people in to take one of those pillars and drag it down. Im all for it. Rick, you bring up a good point. We have been so conditioned so solving a big major problem within an hour or by the third reel of a Motion Picture<\/a> that we expect this to have solved the problem in about five years and it just is not the case. Exactly. Were still deleveraging and the economy is still muddling around here. Yep, yep, particularly with europe in the mud. Theres an attitude that recessions are good for economies, they wring out ek sayses. But theres a part that says you dont have to do that. Thats the doctrine ive heard guys like stan, an m. I. T. Guy says, you know what . I cannot stand by when i have a tool and know how to use it. Recessions an m. I. T. Study, recessions are kind of like economic enemas. Oh, boy. Can we go back to the western metaphor . Have a good weekend, guys. Thank you. Well see you a little bit. Weve got a market thats flat. Industrial is down 2 points. Look at this chart im told. Its coming. Linkedinsharelinked linkedin speaking of big designs, war Rhett Buffett<\/a> they say, im on my way of becoming the richest person in the world. Its just a matter of time i dont know if ill pass him on the right side or left side, its going to happen. So much for the prediction. Hes lost 33 billion in less than a year and a half. How does that happen . Coming up, well take a look at whether a comeback could possibly be in the cards. How he lost his money and then some. Breathtaking. Coming up on closing bell. Stocks kind of hovering. Josh, break down the stocks for us. Lets recap some of the big movers in todays trade. First up, vie a kilometacom jus the bottom line. Also in the green today, mylan. Cowan races this to perform. Remember the intraday low was 17. 55. Now charge back to that offering price of 38 bucks. And well end up on linkedin. Our own Julia Boorstin<\/a> she talked to the ceo of linkedin today. Take a listen. Were going to focus on longterm Value Creation<\/a> and along those lines its about executing the plan and we were pleased with our quarter. Investments pleased as well. Up some 100 so far this year. Maria, back to you. Thank you so much. We Start Talking<\/a> numbers on the stock. Good to see you both. Yusuf, youre up. You upgraded linkedin. You took your price target from 170 to 250. Whats the biggest driver for this stock . Really, the biggest driver is the numbers they put out yesterday and looking out for them the next five to ten years. This is a business thats just really getting started. We think longterm growth is not 15 or 20 . When you put that in the chart its better numbers. What does that tell you, abigail . It suggests theres a weak link that tells you its time to sell. Its moving in the right direction. Up. However, less pleasing to the eye is the piercing channel to the upside. More likely what happens more wauchb this kind of manic trading is a complete reversal. Probably back down to a nearterm floor of support around 160. This chart says to me get out above 200 while you begin. Any thoughts on that yousef . Right. Ill leave that to abigail. What i can tell you is the numbers are improving and frankly if it were to pull back, wed be buying a lot. This is a story that should be playing in the next three to five years. That said, q4 historically is seasonably strong for them and they have a number of products particularly on the advertising side theyre going to be launching between now and year end. So we think the momentum is going to continue. It will be interesting to see. Does valuation become an issue at any point . To me it does. It absolutely does. Go ahead abigail. No. Y yousef, im asking you about valuation. Its one of the most expensive names in our space, yep is the only other name. We feel theres been a rotation into stocks with relative scarcity. In other words, if youre a large cap tech investor, one in exposure to the internet, there really arent that Many Companies<\/a> growing at 50 , 60 , 70 , and doubling their margins over the next few years so i think thats important to consider. Abigail, final word here. Yeah, maria. Valuation does concern me. The price in 1999, ridiculousness. I think thats what its suggesting. When cooler heads prevail, youre going to see that pull back. All right. Well leave it there. Thanks very much to you both. Well keep watching. 30 minutes left. The dow and s p have just turned positive. Any positive close is a new alltime high and were work on our sixth consecutive uptick. Meanwhile u. S. Job growth remains pretty slow despite the Unemployment Rate<\/a> falling to the lowest level in four years. 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You saw one disturbing factor. Explain . I think the one disturbing factor is the Labor Force Participation<\/a> rate has declined and its nearing a historic low and at the pace of the historic low we have People Living<\/a> the labor force. We see the Unemployment Rate<\/a> going down, but actually thats not going down. Also i saw weaker hours and wamgs which are growing at less than 2 . Thats zero real wage growth. So theres not a lot of demand support coming from the labor market. Laura, we had a wall street economist here the last half hour who said i know there are people who are going to be finding fault with the report. He said look back to the 2008, 2009, 2010. This is much better than it was back in those days. Of course. Thats absolutely true. Its a work in progress, right . Five years later . Yes. Weve had steady job creations, weve had job creation, i think 41 months consecutively of private sector job growth. We have job growth which will get us sometime in the middle of next year probably back to the level we had in december 2008. But i think one should say, yeah, were better off than we were, bewere at a slow recovery. The labor market is still weak. Thats what i would say. Why are we taking so long . We had two or three pretty good reports earlier this year and now were back below estimates again. Whats going on here . That has been typical. This has been a good news, bad news recovery. You get a report like today thats a very big disappointment. I think a couple of things stand out. First is the typical privacy sector of the dynamics require on cyclical industries. Were seeing Motor Vehicles<\/a> come back finally. Housing has started to pick up. Im less bullish because its going to get in the way of mortgage solicitation. The policy environmental quite frankly is just deadlocked. Monetary policy is out of bullets. The fiscal policy is locked in a stalemate and were drifting as an economy. Thats a very low bar. At this pace. Its two years to get back to 6 1 2 years unemployment. Its seven years to get back to prerecession employment levels. Thats not good enough. Thats the thing. Its becoming more and more difficult to say we inherited this, were still finding our way back. Once youre five years out, at some point it becomes what are you doing, what policies are in place that are actually going to get businesses hiring again . Thats right. I think you have to call timeout and punch google earth. Theres three mega trends. Two, were not conspicuous consumers and youve got a bar belle employment picture. You know, youre not punching red and green buttons anymore. Laura, are we relying too much on government policy, whether its monetary or fiscal to get the economy going . Why cant a ceo pull the trigger and start hiring again. Why do they have to get incentivized in some fashion to grow their company . I think gary pointed out the action to this. Basically ceos respond to demand and their projections of demand. We have a consumer consumption in the u. S. Economy before the Great Recession<\/a> was growing at 3. 6 a year. Median incomes have not recov recovered. Median wachs have not increased. Most americans are still sitting on depressed housing values. You cannot have that kind of engine of consumption strength to pull the economy forward. The ceos look at that. Demand is weak. Monetary and fiscal policy demand. Thats what theyre doing right now as much as they can. Fiscal policy is contract deeg manned. I have to say, i think its more than that. I agree with you, bill. Companies should be putting some of that money on the Balance Sheet<\/a>. But they have no clarity. Thats the bottom line. Right. We expect with tax rates. We dont know what their tax reform is going to be. Tax reform is all over the place. Its supposed to be changed, but its not yet. Health care benefits, the regulatory environment, thats a complete cloud of smoke. We have no idea whats going to be implemented from dodd frank, et cetera. Can i Say Something<\/a> . Go ahead. I want to agree with maria. The basic point is this. Were running an old playbook. Folks on the household sector, and weve run the playbook and it didnt work. Respect the data. Do something for the business community. Let the traditional business boom drive the recovery. We havent done that yet and allow ceos to make decisions go forward. Laura, you and i talk about tax reform. We need that. I agree. Are we really expecting to go back to the way it used to be where deleveraging this economy . Why should we . Were trying to get off the drugs of death we were on the last 20, 30 years. I agree with that. I just want to say theres new things out there i wrote about that were not paying enough attention to. I agree we need more investment. I believe in Corporate Tax<\/a> reform. Let me say i certainly support all of that. Some gamechangers, we may be underestimating. Big data. We can think about that, but it is improving productivity dramatical dramatically. Very quickly, gary, having said all that, isnt this the new normal we should be getting used to . Absolutely. Theres no question about it. This is a nike swoosh. Im a ceo. We are first going to innovate and then hire, not hire then innovate. Thats the new normal. Were already at alltime highs. Somebodys expecting better times. We may close at an all time high today. Thanks, everybody. We appreciate it. Check this out. We were down on the Dow Jones Industrial<\/a> average. It looked like we were going to close the week negative, but now were in uncharted territory once again. This is exactly my point. Were bemoaning a weak job market and yet were entering another. Even the dell dude probably frustrated. Michael dell ups his off for the company. Heres the shocker. Carl icahn is still not happy about it. Whatever happened to that dell guy . Were hours away from the Time Warner Cable<\/a>. It may black out cbs. Stick around to find the latest. How you should be trading these stocks ahead of that deadline. Will cbs be on Time Warner Cable<\/a> at 5 00 . Stay with us. D call strategies to generate income . With fidelitys options platform, weve completely integrated every step of the process, making it easier to try filters and strategies. To get a list of equity options. Evaluate them with our p l calculator. And execute faster with our more intuitive trade ticket. Im greg stevens, and i helped create fidelitys options platform. Its one more innovative reason serious investors are choosing fidelity. Now get 200 free trades when you open an account. [ male announcer ] ive seen incredible things. Otherworldly things. But there are some things ive never seen before. This ge jet engine can understand 5,000 data samples per second. Which is good for business. Because planes use less fuel, spend less time on the ground and more time in the air. Suddenly, faraway places dont seem so. Far away. So it turns out that michael dells best and final offer for his company that bears his name turned out not to be his best and file offer after all. Thats a threat. The company is agreeing to the sweet offer but carl icahn is not backing down. Were watching dell move sharply higher. The new, dells special committee has reach add buyout agreement to purchase the company for 1375 per share, the group tacking on a onetime holder payout of 13 Cents Per Share<\/a> which michael dell is personally funding. The company has also been in a very public brawl with carl icahn. Yesterday the billionaire investor filed a lawsuit, the latest in a series of attempts to derail the deal. He was all over dell today, first on twitter, saying we are pleased to have won another battle but to dell himself, its far from over. He commented more on dell saying the skpeshl committees actions validate what hes been saying all along, mainly that michael dells offer values the company. Icahn calling that, quote, an insult to the shareholders. They were supposed to vote. Now the shareholders who own the stock as of august 13 will be eligible to vote at a september 12 special meeting on the new deal. Bill, back to you. As the dell turns. Thank you, josh lipton, very much. By the way, somebody at twitter took me to task for saying deleveraging. We are. Corporate america is. The fed is not. Europe is selling assets aggressively. Corporate Balance Sheet<\/a>s have more cash than theyve had in forever. Its not as much as in 2008, 2009 but its still deleveraging. Yes, it is. Where are we going . The dow is going up 14 points. Likes like well go down. David has three things investors need to keep the historic rally rolling. Lets see if he remembers them all. Later while it did not show the growth it hoped for, thats not General Motors<\/a> fault. Coming up, well speak to gms chief economist and what he sees in the economy right now and howze his Gigantic Company<\/a> is prepared for the new health care as well. Thats coming up. Youre not just looking for a house. Youre looking for a place for your life to happen. Some Brokerage Firms<\/a> are. But way too many arent. Why . Because selling their funds makes them more money. Which makes you wonder isnt that a conflict . Search proprietary mutual funds. Yikes then go to etrade. Weve got over 8,000 mutual funds, and not one of them has our name on it. Were in the business of finding the right investments for you. Etrade. Less for us. More for you. The funds prospectus contains its investment objectives, risks, charges, expenses, and other Important Information<\/a> and should be read and considered carefully before investing. For a current prospectus, visit etrade. Com mutualfunds. Oh, just diagramming this accident with my state farm pocket agent app. You can also get a quote and pay your premium with this thing. I thought state farm didnt have all those apps . Where did you hear that . The internet. And you believed it . Yeah. They cant put anything on the internet that isnt true. Where did you hear that . [ both ] the internet. Oh look. Here comes my date. I met him on the internet. Hes a french model. Uh, bonjour. [ male announcer ] state farm. More mobile than ever. Get to a better state. Welcome back, were minutes from the close. Is it still worth getting into this market right now . Lets talk about that . Weve got david joining us from Morgan Stanley<\/a> wealth management. Chris wolfe is with merrill lyn lynch. Good to see you both. Hello. Ive been saying this all hour. Goldilocks, not too cold, not too hot. The big factors are still clicking. Secondly, housing. 38 up on the new home sales. 15 up in terms of the volume on existing home sales. Number three. Consumer. Consumer credit. Consumer spending and Consumer Confidence<\/a> and fourth is production. Philly fed, chicago. And empire. Enjoy the ride. As prince said, party like its 1999. Chris, what are you hearing . Are they risk aversed . Putting money into this thing . What are they doing . Finaling markets that are global. Good valuation and lot of discounted fear on the kind of premiums based into those. Thats first. Secondly, we like the u. S. Story. The domestic story works very well, particularly if you talk about a small caps recovery. Theyre at the highs. Youre not buying cheap. All they need is revenue growth. The last thing theyre doing is really thinking about about that bond allocation. Weve been so short. So dipping our toes in there. I love his work. But watch out on the small caps. They sell for 26 times earnings. Its at 26 times, maria. It sells for a thousand approximately and theyre going to earn 3950. 3950 into a thousand is 26 times and thats down from an earnings estimate at the beginning of this year of 50,000. Do you like europe . We like europe and love japan. It was up 3 last night. Night before, 2 1 2 percent. Things seem to be clicking but the rubber meets the road whether hes going to agree to do that consumer sales tax increase. When is it time to take profits . When do we say enough is enough . Its time to take something off the table . Its time to rebalance. Take your money out of bonds and put it where . Its the other way around. Thing about that bond allocation. The second is reallocate globally. They for goat about europe, forgot about japan and other parts of the market and got stuck in the commodities in the end. Thats been the other reallocation. They go toward things like david mentioned. So youre telling us to take my money out of equities, put it in bonds right now . Keep a portfolio balance. Shes not doing it right now. Maria, i would not be buying into that trade. Watch out for the bonds. Even though they lost at 10 in total returns so far this year. Take it easy on the bonds. Stay short duration. Japan and europe, you might like those stories a lot. Thank you so much, gentlemen. Appreciate it. What have you got there, bill . I misunderstood. I thought there was a group of ladies cocktails coming to ring the closing bell today. I thought it was those cause mos but its the new york cosmos. After 30 years, theyre coming back. Weve got some of the originals to return to new york to play and theyre playing a game tonight, as a matter of fact. Were going to see them ring the bell. Closing bell coming up. Hes seeing another sign that this bull market has the opportunity to move higher. Well tell you about that. Plus, were wondering why Actor George Clooney<\/a> is picking on dan loeb. We wonder if hes right to slam him. Youve got to stick around to hear this one and get marias observation. Thats coming up next on closing bell. Youre watching cnbc, first in business worldwide. One thats 80 smaller. Uses 89 less energy. And costs 77 less. Its called hp moonshot. And its giving the internet the room it needs to grow. This. Is going to be big. Its time to build a better enterprise. Together. The healthcare law gives us powerful tools to fight it. To investigate it. Prosecute it. And stop criminals. Our senior medicare patrol volunteers. Are teaching seniors across the country. To stop, spot, and report fraud. You can help. Guard your medicare card. Dont give out your card number over the phone. Call to report any suspected fraud. Were cracking down on medicare fraud. Lets make medicare stronger for allus. [ indistinct shouting ] [ male announcer ] time and sales data. Splitsecond stats. [ indistinct shouting ] its so close to the options floor. [ indistinct shouting, bell dinging ]. Youll bust your brain box. All on thinkorswim from td ameritrade. Two and a half minutes left. I asked for a chart. I didnt realize this. Did you see this . Look how volatile the market was this week . We were all over the map trying to figure out what the fed was going to do. Then they sent the dow higher with the comments that they were going to make that the tapering was going to continue for the foreseeable future. We had the jobs numbers this morning and were back for a week. After all that volatility. Thats all were going do for the week but it will be another alltime high. The tenyear yield also very volatile. Look at this. This is when the jobs report came out. A big rally pushes Prices Higher<\/a> and it dropped about 10 to 13 basis points. Thats volatility. Thats volatility. There are more dips in the market than the nascar race. We love buying the dips. We still love the mantra. Absolutely. For years that has been sustained. For years only the mugs would buy them. Absolutely. When the average joe was buying bonds, they were wrong. That trades unwinding. So you get corrections here and there. Truisms that we thought would hold true. You have the Technical Analysis<\/a>. It has not worked very well in this market. There are many indications where the market has not corrected and we have not seen one. Except for the oldest form of Technical Analysis<\/a> out there. The dow tlooer that says when the industrials and transports are saying that. Thats very bullish. Both are doing that. The transports are having their best week this week in about a year right now. And i am bullish. Believe it or not, most people dont believe that. Still look for that correction going home. I like that. There has to be a correction somewhere but its been a very good trade. They dont last very long. Thanks, ben. Have a good weekend. Like your ties always on a friday. Thats it. Were going out for the alltime high for the dow and s p after the weaker than expected jobs report. Its that kind of a job market and that kind of economy. Stay tuned. Were coming up in the next half hour with maria bartiroma. And happy friday. Hello, everybody. Im maria bartiroma. Even after a weak jobs report were once again closing an uncharted territory. New high for the dow, new high for the s p average. Seeing some gains at the end of the day. Money moving into equities finishing up more than 28","publisher":{"@type":"Organization","name":"archive.org","logo":{"@type":"ImageObject","width":"800","height":"600","url":"\/\/ia600709.us.archive.org\/34\/items\/CNBC_20130802_190000_Closing_Bell\/CNBC_20130802_190000_Closing_Bell.thumbs\/CNBC_20130802_190000_Closing_Bell_000001.jpg"}},"autauthor":{"@type":"Organization"},"author":{"sameAs":"archive.org","name":"archive.org"}}],"coverageEndTime":"20240619T12:35:10+00:00"}